I believe that small bussines should learn as much as possible from start-ups and vice versa. I said that because from my point of view start-ups is the early stage of a business. once the start-up has success and need to build up, it's become a business, such as SME, large companies, etc.. it's only a question of time. Maybe you aren't expect this reply but I guess that we should not make big differences between start-ups and conventional business. It's a different approach for the same target.

There are many kinds of start-ups and SMEs. Therefore it is difficult to provide a generic answer to this question. I focus on start-ups, which aspire to grow rapidly in their domestic markets or internationally. The latter group includes so called born-global companies. These companies are that small minority of start-ups, which interest venture capital. Mentioned type of start-ups typically struggle with the triangle of growth, profitability and funding (cash-flow). SMEs could learn from them how to handle this difficult issue. Another typical feature of these start-ups is their drive, flexibility and focus on innovations. Due to drive  and flexibility start-ups are quick to learn and adapt their offering to the feedback they get from their (prospective) clients. This is something that SMEs, who seek to grow, could learn and benefit from since they already have a  client base.

As the markets and customer relations of start-ups are often poorly understood, that may lead to side tracks, which could be hazardous in the worst case. Avoiding that is another issue that SMEs could learn if they want to grow rapidly. Finally, key questions in the analysis of start-ups questions such as: (1) What is the unique product or service with related value offering that makes the start-up unique and valuable to its customers are those ideas protected with relevant IPRs? (2) does the start-up have a competent team to execute business? and (3) Does the start-up have a clear understanding about its markets, market penetration and resulting cash-flow (business model, realistic understanding of markets, competitors, etc with sufficient contingencies)? A SME or any company could learn from this by answering these questions 

Hello, Nitin,

Long before I launched my businesses (one a retail operation, the other a wholesale manufacturing concern), I spent many hours reading about the success and failures of other businesses. When I formed my businesses I embedded into the DNA of my start-ups what I had learned. Some of the valuable lessons I learned from existing businesses had to do with setting high standards in employee and customer relations, service and product quality.

Looking back at when my businesses were in the start-up phase, I think that a very important lesson that a small business can learn from a start-up has to do with agility and responsiveness to the business environment. Start-ups, by necessity, must be very creative, agile, and responsive to the environment; whereas some of this ability can be lost as the business moves from start-up to the small business stage.

This is an interesting question because many small businesses are still start-ups. Presuming the original thought on start-ups is one of high tech lean start ups; then small companies can learn much from the ability to do more with less. In addition there is significant value in understanding how markets value start-ups versus other entities. The small business owner can calibrate their dynamics with a start up and identify areas for improvement and ways to do things more efficiently.

That said start-ups can learn from small businesses. It is not and easy road and there are many ways to achieve a goals. Further many small business owners may be characterized as having life style businesses, where as many start-ups might be accused of being either too focused on a social goal or too focused on making money. The small business person more often has found the middle ground between the two is good. Anytime cross fertilization can occur it should be of value to each party. Shame on the individuals who do not recognize the value in learning from others experiences.

Actually most super-duper tech startups turn out to be very poor small businesses, because if they do not scale up to the sky, their company just disappears.

So, I think most of the learning would have to be the other way round, because the abundance of money in tech startups often leads up to bad structures. Companies overlook small opportunities for saving and getting money, just thinking about the coup they will land. It is understandable, because speed usually beats anything else in startups.

No, I do not see many things small companies could learn hence one thing: Because startups can attract good people for most positions, there is a level of professionalism that should inspire small companies. Even if they cannot match earning perspectives, a smart combination of internal / external expertise can help a lot of small companies. Many small companies are very bad in anything besides their core business. SO, your ice cake producer may be a good ice cake maker, but he may also be a very bad manager, a bad inventory keeper and such. This is where he could improve a lot.

But, really, the main direction of knowledge transfer should be the other way round.

see my recent article attached

Andreas,

Most start-ups and small businesses are NOT high tech. What you say about high tech is fair; but what are your thoughts around the plain vanilla type businesses?

Dear Nitin,

To address your question, need to define start-ups and small businesses. From the question you asked, I assume that you have considered these terms different and not overlapping.

Start-up, could be defined as an initial stage of new business. It could either be small or big or high tech or low tech ( the nature or the size of business is not involved in defining terms).

  Sart-up of small business  is the initial stage of that business.  Then one has to differentiate  start-ups of big businesses as you have assumed. If this argument is acceptable only one can proceed further.

Upananda

@Robert: Yes, I assumed that the opener referred to typical tech startups, cause that's where there are big differences.

"Normal" startups usually start with a certain mission or competence, something they think they can do very good or at least good enough to earn a living. Here, one thing to keep in mind or to learn from other companies is that that singular mission or competence probably is not enough to be successful. They have other qualities to develop too. For example they should look for good solutions for their administration, controlling and such. Many small steps ignore these important fields and that's where problems will arise sooner or later.

@Andreas . You are right. I was referring to a typical tech startup . 

Thank you all for your valuable insights !  Very interesting thoughts.,, I Will try to summarize the key takeaways from this conversation.. shortly.

All business must go through start up stage. Somehow the nature of preparation or readiness will different depending on the nature of business itself; whether big or small; service or manufacturing; labour- or machine-oriented, high or low initial capital investment and short or long run business. One of the most important preparation for the start up business is the Business Plan that explains the nature of the entire operation.

All businesses, irrespective of the sizes, have start ups.  However some businesses remain at the same size for long time, perhaps, during the whole business life.  then one cannot distinguish  start up from the small business.

Second, when business is grown, your study has to be retrospective and depend on historical evidence. How ever one cannot repeat the same.  You can get into river only once. Next step will be on another mass of water even though your place on the river bank is the same.

  Upananda

One important distinction that may be helpful is to understand the starting point when comparing startups with small businesses. The impact of imprinting can have a significant impact on both groups of firms in ways that (I think) may offer some insights into the qualities they share. Several good papers published over the last decade or so on imprinting. For example, see Eisenhardt and Schoonhoven's (1990) paper in Administrative Science Quarterly, Milanov and Fernhaber's (2009) paper in Journal of Business Venturing, Beckman and Burton's (2008) paper in Org Science, among others. Good luck.

You can have a look to this recent article of mine

Hi Nitin

There are many ways that SMEs could learn from start-ups. I would tackle the question by dividing the answers into various aspects such as technical, managerial, marketing and human resources. You may refer my book chapter (listed in my publications) on the critical success factors of SMEs in Malaysia. 

Hope it is useful.

Thank you 

Nitin, the design characteristics of startups including the possibility of affordable loss, the facilitation of a must-have, the ability to make fast decisions and the ability to take ownership of challenging situations to turn them into opportunities are things that could be learnt from startup companies. Interesting.

Entrepreneurs role is phenomenal in start-up. Start-ups are full of energy, enthusiasm and positivity. They are ready for failure and keep up to date. Their products are innovative, new and likeable, I believe these things can be a good source of learning for small businesses which they somehow lack.

... and the way how scaling follows innovation - and (maybe sometimes) later how next innovation initiatives follow scaling. There is still much to discover and learn when we look at startup growth paths. Why not open the door to more evolutionary studies of startup growth?!

Small businesses are unique. It is difficult to group all sectors or disciplines together. Making generalized statements about SMBs can lead to false assumptions. There are many small businesses that are not viable due to their lack of a good idea or plan. Darwin's evolution theory may be a proper method for explaining the phenomenon. Of course, there are startups that use VC and others that are self-funded. The two are drastically different. I am performing a survey that would help with this question.

I am conducting a research survey for my dissertation to compare academicians' and practitioners' opinions on Small Software as a Service Sustainability). It aligns with your questions. Would you kindly participate in this 3-5 minute survey? Please share this link with your friends. Please choose professor and business to qualify for the survey. It is 100% anonymous.

https://www.surveymonkey.com/r/D7Y8W3V

Thank you for helping expand our knowledge on sustainability!

Best regards,

Jeff

In my view, what small businesses can learn from startups is mainly about the possible opportunities that might have emerged after the small businesses have been established. Given the dynamic nature of business environment, small businesses might be locked in their current business and fail to scan the environment for possible opportunities. By closely scrutinizing what specific activities/businesses are being pursued by startups, small businesses can learn new areas that might be worth exploiting. The small businesses can decide to engage in the new areas being pursued by startups via diversification, merger or acquisition.

Companies and enterprises from the SME sector can learn a lot from innovative startups, i.e. small business entities that have been established recently, are developing quickly, quickly gaining a significant share in the market of selling products or services and achieving business successes. First of all, the key features of this type of entities include innovation, excellent management, the use of modern technologies, flexibility in adapting to the economic and competitive environment, etc.

Best wishes,

Dariusz Prokopowicz

Below are six ways established corporations can learn from startup culture in order to stay relevant:

Adapt for Agility. A corporation can model some of a startup's agility by adapting its structure. ...

Change How Work Gets Done. ...

Encourage Innovation. ...

Focus on Talent. ...

Adapt Your Leadership Style. ...

Change the Point of View. https://www.linkedin.com/pulse/6-lessons-corporations-can-learn-from-startups-karen-greenbaum

Get smart. There are thousands of books and articles available about starting a company. It is impossible to read and follow every piece of advice, but it is valuable to know the different strategies and perspectives that are out there and to apply the most fitting to your venture. Especially for first time entrepreneurs, there are many, many people who have already learned hard lessons through trial and error—take advantage of their experiences and your business will start off ahead of the game. https://www.google.com/amp/s/www.forbes.com/sites/groupthink/2016/10/17/7-lessons-small-businesses-can-learn-from-tech-startups/amp/

Establishing the business model for your business is something that might not be as easy as it sounds. Do not waste your time looking for partners or investors, performing competitive research, or even moving forward with a website, before you have a clear idea of what need your business will fill, how you will fill it…and most importantly, how you will create value and monetize whatever it is you do. https://www.google.com/amp/s/www.forbes.com/sites/groupthink/2016/10/17/7-lessons-small-businesses-can-learn-from-tech-startups/amp/

Agree with Chinaza Godswill Awuchi

Me too.

Hi. I hope the following website could help you:

https://www.valuer.ai/blog/6-lessons-corporations-can-learn-from-startups

I think the problem is sustainability.

Start small and grow with time at your own pace.

Established companies of all kinds face the fear of failure. Startups tell so many interesting stories that failure is part of the business and how you fail forward - in ways that corporates can learn a lot.